Egyptian lawmakers recently hailed the parliament’s endorsement of a pact that allows the country to join the New Development Bank, a report has said. According to the report, the lawmakers believe joining this BRICS-backed institution will help Egypt reduce its demand for dollars and enable it to preserve its forex reserves.
Joining BRICS
Following the Egyptian parliament’s recent endorsement of an agreement that paves the way for the country to join the New Development Bank, lawmaker Mohamed Abdel-Hamid, reportedly said the move helps reduce demand for U.S. dollars. Set up by Brazil, Russia, India, China and South Africa or BRICS nation states, the New Development Bank seeks to support “public or private projects through loans, guarantees, equity participation and other financial instruments.”
In addition to helping Egypt preserve its foreign currency reserves, Abdel-Hamid, who is the deputy chairman of the parliament’s economic committee, said joining the institution enables the country to get the bank’s support in areas such as health, infrastructure and telecommunications.
“Egypt’s joining of the BRICS group’s New Development Bank will also relieve the state budget of the pressure of finding U.S. dollars to meet the country’s imports as members of the bank can use their national currencies in exchange for trade,” the lawmaker reportedly said.
According to an Economic Times report, Egypt, which recently secured a bailout package from the International Monetary Fund (IMF), has become the third country to express interest in joining the group of five leading emerging economies known as BRICS.
Diminishing the Dollar’s Dominance
Meanwhile, Abdel-Hamid’s sentiments about Egypt’s prospects once it joins BRICS were also echoed by another lawmaker Mervat Mattar. In her remarks following the endorsement of the pact, Mattar characterized BRICS as an institution that will help also diminish the dollar’s domination.
“The BRICS group is an important forum that can steer the course of the international economy away from American domination and the U.S. dollar,” Mattar reportedly said.
To support her argument, Mattar reportedly pointed to the war in Ukraine and the impact of this on Egypt’s import bill.
Meanwhile, another lawmaker, Ahmed El-Awadi, head of parliament’s defense and national security committee, said the move will create new markets for Egypt’s agricultural and industrial products.
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Terence Zimwara
Terence Zimwara is a Zimbabwe award-winning journalist, author and writer. He has written extensively about the economic troubles of some African countries as well as how digital currencies can provide Africans with an escape route.
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